3. Income from social security
Recognising that parents with young children may not be able to be in employment or may feel that being in work is not the most suitable or desirable choice while raising their child, social security payments are often relied upon to keep families with young children out of poverty. This is particularly relevant for families with babies under one, when children need greater time and energy from parents.
3.1 Targeted reach of benefits
There are a range of benefits, administered by Social Security Scotland, that families with babies under one can claim.
Best Start Grant Pregnancy and Baby Payments are intended to help pay for items such as maternity clothes, a pram or additional heating. Best Start Foods is intended to buy healthy foods such as eggs, milk, vegetables, fruits, and pulses. The Scottish Child Payment helps towards the cost of looking after a child. Data is not published on the number of parents with a child under one year old claiming these specific benefits which makes it hard to calculate reach. However, of all the Best Start Grants applications, a third (34%) were specifically for Best Start Grant Pregnancy and Baby Payment.
Ensuring that benefits and support reach those in need is key to ensuring a difference is made to peoples' lives. There are some factors to consider:
Raising awareness of benefits. Parents become aware of the benefits available to them through multiple sources, including support organisations (e.g. One Parent Families Scotland) and healthcare practitioners. The role these organisations and individuals play in raising awareness is crucial. Research with 36 people who have received Best Start Grants, including 17 who had received the Pregnancy and Baby Payment, found that some were initially surprised that the benefit was available to them and they thought they would not meet the eligibility criteria. These women did not view the benefit as stigmatising and intended to apply again if possible. They also generally found the application process straightforward, though suggested some improvements, for example, to make it easier for applicants who have literacy issues, or to communicate more effectively with people when claims are subject to delays.
Some parents/carers are new to the system. The financial pressures created when experiencing pregnancy and the birth of a child can lead some families to need to access social security payments. This is particularly complicated in cases where parents are re-accessing these or accessing for the first time. In Scotland a lot of effort has been made to streamline the process for those accessing benefits for the first time, but it can still be a daunting and complex process.
"I'd never used benefits before having children. Didn't really know how the benefits system worked."
Mother over 26, with partner
Indeed, data highlights that a significant number of families begin to claim Universal Credit following the birth of a child. The latest data shows that households with a child under one constituted a higher proportion of new Universal Credit claims. An average of 5.7% of households on Universal Credit with a child under one year old were new claims in 2020-21, compared with 5.5% of all households on Universal Credit. In 2021-22, up until the end January 2022, these figures were 3.5% and 2.5%, respectively. Similarly, the proportion of new Universal Credit claims which were from households with a child under one year of age was slightly higher than the proportion of all claims from households with a child of any age: 3.8% compared to 3.7% in 2020-21, and 4.9% compared to 3.5% in 2021-22 up until the end of January 2022.
- Accessing all the benefits and support can be complex and can cause high levels of stress. Research with new parents has highlighted that access to Universal Credit can create a lot of pressure and uncertainty for families due to the payments in arrears system where families have to live for 5-6 weeks without income on initial application. The option of taking an advance creates its own problems as this becomes a further monthly expense once regular payments start. The same research also highlights difficulties for new parents in knowing where to begin with navigating the complex benefits system alongside the difficulties in undertaking the tasks involved during the application process due to the potential pressures and challenges of their pregnancy.
- Impact of reforms. Reforms to benefits such as the two-child-limit can disproportionately impact families with younger children. All families affected to date by this policy change will have at least one child under the age of five and since families with young children are already more likely to be living in poverty this can compound their experience. The two-child limit has been found to have directly impacted upon household finances, with families affected reporting having to cut back on essentials such as clothes, dentistry, baby equipment, and the quantity and quality of food. Even then families have described sometimes still ending up in debt and rent arrears despite making these cuts to essential items. Further, as the two-child limit assumes that parents will be able to work to increase their income, this is a pertinent area for concern for families with a baby as it is not always the case, or desirable, for parents to consider or commit to full time work.
Analysis by the Scottish Government in April 2022 on the impacts of UK Government welfare reforms since 2015 found that reversing the imposition of the two-child limit and the related removal of the family element of Universal Credit and Child Tax Credit was the most cost-effective way to reduce child poverty out of all the reforms modelled. Reversing these policies would pull an estimated 10,000 children out of poverty in 2023-24 at a cost of around £120 million, boosting disposable income for households with children in the bottom 20% of the income distribution by over 6%.
3.2 Value of benefits
This section of the report focuses on benefits specifically targeted at those who have a baby, rather than exploring the wide range of benefits a family with a baby could potentially access. These are:
- One of the payments from the Best Start Grants is the Pregnancy and Baby Payment, which is £642.35 on the birth of a first child, and £321.20 for any subsequent children.
- Best Start Foods is a prepaid card that can be used in shops or online to buy healthy foods. It provides £36 every 4 weeks for those with children aged under one.
- Scottish Child Payment is an income supplement which delivers regular, additional financial help to low-income families. It provides £80 every four weeks (increasing to £100 by the end of 2022).
Evaluations of Best Start Foods and Scottish Child Payment will be published later this year. These will offer insights into the impact of these payments on recipients. However, qualitative research with Best Start Grant recipients, including 17 who had received the Pregnancy and Baby Payment, found that the payments had a positive impact on household finances at key transitional stages of children's' lives. The payments helped to reduce parental financial stress and anxiety, and prevented them from falling into debt or having to cut down on essential household spending, such as for food and bills. Participants who received the Pregnancy and Baby Payment reported used the money for a wide range of items, including health and hygiene products (e.g. nappies, dummies) nursery products (e.g. cots, clothes) and items for mothers (e.g. breast pads).
In addition to the benefits available through Social Security Scotland, there is also Universal Credit. On the whole, awards to families with children are on average higher than for those without children. But when looking specifically at families with babies, the average award was slightly lower for households with a child under one than for all Universal Credit claimants with any age of children (£927 per month compared to £965 in 2020-21). This can partly be explained by households with a baby being less likely to be in receipt of the carer element, the disabled child element or help with housing costs (when compared to all households with children). Furthermore, households with a child under one more likely to be entitled to fewer rooms, partly because the calculation is made based on the age of the child), and in turn a lower Local Housing Allowance (LHA) rate than all households with any age of children.
Young asylum seekers in Scotland are now eligible to receive financial support on the birth of their children. Those aged under 18 years can apply for the Best Start Grant Pregnancy and Baby Payment after the Scottish Government reached agreement with the UK Government that it would not jeopardise their immigration status.
3.3 Take-up of benefits
Best Start Grant and Best Start Foods are means tested benefits available for families with a child under one. The estimated take-up rate for the Best Start Grant is 79-84%, and for Best Start Foods the rate is 77%. Evaluation suggests that these benefits have had a positive impact on households finances and enabled some people to meet key expenses.
Estimated take-up of Scotland's universal Baby Box scheme is over 90%, with 91% of recipients saying it had saved them money. Parents on low incomes were more likely than others to say the box had financial benefits. However, while helpful in supporting parents financially while their child is young, current evidence highlights that interventions such as the Baby Box and Best Start Grants are not currently at the scale to have an impact on headline poverty rates. In addition, a lack of early awareness of the Baby Box and its contents can reduce its positive financial impact, with items included in it already having been purchased by expectant parents.
Some parents find that children being eligible for different benefits at different ages, such as with Best Start Grant and Best Start Foods, can be confusing. Having to ensure that application happens at the right time for each child can make take-up of benefits more problematic for some families. The second tackling child poverty delivery plan, Best Start, Bright Futures, states that Scottish Government will pass legislation to remove the income thresholds from Best Start Foods by 2023-24 bringing eligibility in line with both Best Start Grant and Scottish Child Payment.
Using existing points of contact, such as while registering children's births, and through midwives and health visitors, to provide social security advice, information and referrals to new parents can support those experiencing, or at risk of, child poverty. The Healthier Wealthier Children project is one example of a successful healthcare-based initiative to improve benefit take-up among families experiencing, or at risk of, child poverty. The project improved benefit take-up by developing referral and information pathways between early-years health staff (mainly health visitors and midwives) and locally-commissioned money advice services. Local authorities report that GP practices and other healthcare settings can be successful sites for social security advice for adults overall, and child healthcare and maternity services, such as midwifery and Family Nurse Partnership, for parents specifically.
All the mothers we interviewed were in receipt of benefits, and said that applying for them (specifically, Universal Credit, Child Benefit, and Scottish Child Payment) was quite straightforward. There were some positive accounts of the difference made by the Best Start Grant as it enabled families to buy cots, wardrobes etc. However, they told us that waiting periods and delayed payments from Universal Credit had been a challenge.
One mother highlighted that, without a support service signposting eligibility, it was not clear which benefits a family is entitled to.
"Support wise, I think it's easier to find it nowadays. But benefit wise it's really hard to find them. Particularly if you don't have the right people to help you find the benefits you are entitled. The helped needs to be broadcasted so that everyone can access it."
Mother under 20, with partner
A clear theme in the interviews was the challenge of striking a balance between employment and social security to ensure there was sufficient household income:
"We are looking at getting jobs again… it's the only way… to get a balance of both things. You can only work a certain amount to continue to receive Universal Credit… but then you need to work much more hours to get all the income you need. So it's a tricky balance to calculate what's right for you."
Mother under 20, with partner
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